We examine erythropoiesis and erythroid gene expression to develop strategies to alter the program for hemoglobin production and activate fetal hemoglobin in treatment of sickle cell anemia and thalassemia. Erythropoietin stimulates erythroid progenitor cells and induces transcription factors that positively regulate erythroid differentiation including GATA-1, GATA-2, Tal-1 and, in adult cells, EKLF. We found that over expression of GATA-1 transactivates the erythropoietin receptor and globin gene expression, decreases GATA-2 expression and can increase cell proliferation. In contrast, increases in GATA-2 induce megakaryocytic markers and multinuclearity, suggesting that the balance between GATA-1 and GATA-2 determine the erythroid/megakaryocytic lineages. Tal-1 exerts its influence early during hematopoietic stem cell formation, and is also required for erythroid differentiation. Over expression of Tal-1 induces a number of genes associated with the erythroid program including GATA-1, GATA-2, erythropoietin receptor and globin genes, including both beta- and gamma-globins and ferritin. Using a Tal-1 immunoprecipitation assay we identified genomic Tal-1 target sequence that contains the consensus Tal-1 E-box binding motif together with a binding site for SATB1, a protein that binds to the matrix attachment regions (MARs) of DNA and can act as a transcriptional repressor. This site binds to Tal-1 in vivo and binding decreases with erythroid differentiation. The corresponding DNA-protein binding motif confers transcription repression activity in a reporter gene assay in a Tal-1 and SATB1 dependent manner. These data provide a new interaction for Tal-1 in cooperation with SATB1, and suggest a novel manner by which Tal-1 may regulate transcription during erythroid differentiation in a chromatin specific manner. Oxygen tension modifies erythropoietin production as well as the response of erythroid progenitor cells to erythropoietin. Changes in oxygen tension affects the induction by erythropoietin of transcription factors that regulate erythopoiesis and the proportion of fetal hemoglobin produced. Erythropoietin stimulation of CD34+ hematopoietic progenitor cells exhibited optimum growth and fetal hemoglobin expression at 5% O2 with decreased sensitivity after the peak of erythropoietin receptor expression (8 days). These effects suggest that variation of oxygen tension in the microenvironment of the bone marrow and the proximity of early and late erythroid progenitor cells to vascular structures can affect the extent of and response to inducers of fetal hemoglobin production. In other strategies to induce fetal hemoglobin, globin specific ribozymes were designed to alter hemoglobin production in primary erythroid progenitor cells. The ability to reduce globin gene expression by targeting globin specific mRNA has been shown using an alpha-globin specific multiribozyme. The strategy is now applied to beta-globin mRNA. These and other strategies will be tested in transgenic mice engineered to express exclusively human sickle hemoglobin. Studies show that while these animals co-expressing mouse beta-globin are not useful models for human sickle cell trait, animals that express exclusively sickle hemoglobin exhibit manifestations closer to that of the human disease including renal medullary involvement.